Jacob Hacker

Insecurity Separates Middle Class from Romney, Ryan

Leo Gerard — Tue, 28 Aug 2012 11:28:09 -0400

The rich, those born sucking silver spoons like Mitt Romney and Paul Ryan, really are different from the middle class. The wealthy grow up and live their lives wrapped in security. That’s what gives them the arrogance to organize a posse to hold down a fellow prep school student and chop off his hair, mock NASCAR fans’ clothes and ridicule cookies offered by supporters. No matter what, Romney and Ryan will remain rich and secure.

By contrast, those born into poverty or the middle class live lives nagged by insecurity. They know their jobs could be off-shored at any moment. They know their employers may raid their pensions in bankruptcy. Their major asset in life, their home, may have lost a third of its value when the Wall Street-inflated housing bubble burst. Rich would be great, but those born without trust funds work hardest just to attain a little security.

Last week, the Pew Research Center issued a report detailing how insecurity has increased for the middle class since 2000. The non-partisan Congressional Budget Office (CBO) published a report predicting increased insecurity for the middle class if Congress takes no action on taxes and budget cuts within the next four months. A third report released last week, called Prosperity Economics, describes how to revive the economy and broaden security.

A true democratic republic, where the majority rules, would reverse the past decade’s trend against the middle class, forestall the CBO prediction, and increase security for the masses. The silver spooners seeking the Oval Office have given no indication, however, that they intend to ease the uncertainty of the plastic spooners.

The Pew Research Center looked at how the middle class fared since 2000. In a word, it’s badly. This is what Pew called its findings: “The Lost Decade of the Middle Class: Fewer, Poorer, Gloomier.” Here’s how the center sums it up:

“Since 2000, the middle class has shrunk in size, fallen backward in income and wealth, and shed some – but by no means all – of its characteristic faith in the future.”

Over the past 40 years, the percentage of adults in the middle class shrank from 61 to 51. Also, the rich seized a greater portion of the nation’s household income. Their cut rose from 29 percent to 46. Almost all of that came from the middle class, whose share fell from 62 percent to 45.

Similarly, the middle class suffered a 28 percent drop in wealth over the past decade, much of that in housing value.

The losses intensified middle-class insecurity. Those interviewed by the Pew researchers expressed pessimism. For America, which sees itself as the land of opportunity, this survey result is dispiriting: 29 percent of the middle class said hard work and determination no longer guarantee success for most people. The American Dream is dying.

Middle-class insecurity and gloom will worsen if Congress allows the country to fall off the fiscal cliff – if it fails to renew at least some tax cuts set to expire at year’s end or temper scheduled budget cuts. The CBO, in its Update to the Budget and Economic Outlook: Fiscal Years 2012 to 2022, said if Congress does not change its current tax and spending plan, the United States will descend into recession again next year and unemployment will rise to 9 percent.

The budget cuts were demanded last year by House Republicans, led by Ryan, who refused to raise the nation’s debt ceiling until they got a deal guaranteeing the budget slashing. President Obama has repeatedly sought money for infrastructure improvement and other job-creating projects to relieve unemployment and prevent a double dip recession, but Republicans have rebuffed him. They also have rejected his plan to renew middle class tax breaks while terminating the massively larger breaks for the rich.

Republicans like Ryan have decided relieving the deficit is more important than relieving uncertainty for the middle class. The perfect symbol of that is Ryan’s plan to voucherize Medicare. Social Security and Medicare are beloved by the middle class because of the security they provide in retirement. Ryan’s vouchers would end that security because they would dramatically increase costs for senior citizens. Ryan and his followers demand austerity for the middle class and tax cuts for the rich.

Austerity is not necessary, according to two Yale researchers. They offer an alternative, Prosperity Economics.

Jacob Hacker, a Yale professor and director of the Institution for Social and Policy Studies, and Nate Loewentheil, a Yale law student, describe how to create a dynamic economy and foster a society “marked by greater health, broader security, increased equality of opportunity, and more broadly distributed growth.”

They believe in resurrecting the American Dream. While the middle class is losing faith, Hacker and Loewentheil say it doesn’t have to be that way.

In their plan, everyone benefits, not just the silver spooners. It’s not, however, a strategy likely to be adopted by austerity advocates Romney and Ryan, who have never experienced the pain of economic insecurity suffered by the plastic spoon class.

Raising the Medicare Age: 8 Reasons It's the Worst Presidential "Bargain" Since 1854

Richard Eskow — Tue, 30 Aug 2011 00:12:09 -0400

When it comes to the "Grand Bargain" they're pushing in Washington, the movie posters for The Fly said it best: Be afraid. Be very afraid.

Othe people are using our lives as bargaining chips. Whether it's the so-called Congressional "Super Committee" or the President's push for that grandé-sized deal, they want to look "grand" while we get stuck with the "bargain."

The Capital's misplaced focus on austerity has led to plenty of bad ideas, but one of the worst is raising the Medicare retirement age to 67. It may be the most destructive deal to come out of Washington since the Kansas-Nebraska Act of 1854. It's unfair, short-sighted, and will actually cost the economy more money than we're spending today.

No Democratic President would accept an idea like that, right? Right?

Be afraid. Be very afraid.

Say it ain't so ...

Before negotiations on a debt-ceiling deal broke down, Politico reported that the President and John Boehner had agreed on "gradually increasing the eligibility age from 65 to 67 over about two decades, according to administration and Republican congressional sources."

But that's just one story, and it only cites two sources. Maybe those sources were wrong. Did anybody double-check? As as matter of fact, yes.

"According to five separate sources (emphasis ours) with knowledge of negotiations -- including both Republicans and Democrats -- the president offered an increase in the eligibility age for Medicare, from 65 to 67."

Note the language: "The President offered ..." The Republicans didn't demand it. Reports say that the President offered it.

The Single Worst Idea

When Yale Professor Jacob Hacker called this proposal “the single worst idea for Medicare reform” he was being far too kind. For one thing, it's not reform - it's reduction. It's not Prof. Hacker's fault that this has become the accepted terminology, but we should stop conflating reform with reduction in our public debate.

Secondly, Prof. Hacker's certainly right that it's a terrible idea for Medicare. But he's selling it short. It's also a terrible idea for health care costs, job creation ... in fact, for the entire economy. You could say it's hit the trifecta of bad policy notions. We admire Jacob Hacker, but we'll have to amend his comments: It qualifies as the "single worst idea" in lots of policy areas.

Again, from Politico:

Neera Tanden, chief operating officer at the Center for American Progress and a former Obama administration health reform adviser, said it's "troubling that a progressive president would put forward that proposal."

Readers may interpret that comment any number of ways, none of which augur well for future policy decisions or the 2012 election. And now Washington's buzzing with well-sourced backchannel talk that the President will include this change in his big post-Labor Day "jobs" announcement.

Let us count the ways

How bad is this idea? We only have a few hundred words to make our case and about 24 hours to do it, so we'd have to warp the space/time continuum to include all the reasons why it's so misguided. Since we don't have the budget for that, we'll just hit eight of the high points for now:

1. It would save money at the Federal level -- but it would cost more everywhere else.

A Kaiser Foundation study concluded that "raising Medicare’s eligibility to 67 in 2014 would generate an estimated $5.7 billion in net savings to the federal government, but also result in an estimated net increase of $3.7 billion in out-of-pocket costs for 65- and 66-year-olds, and $4.5 billion in employer retiree health-care costs."

So it would save $5.7 billion from the Federal budget in the first year, but it would cost everyone else $8.2 billion. That means it would increase health care costs by $2.5 billion. (We do the math so you don't have to.) Who would benefit from a lower Federal deficit? High earners who want to cut spending so they're not pressured to pay more taxes. Who would get hurt? Older Americans, employers, and anybody on an employee benefit plan. That's government of the rich, for the rich, and by the rich.

2. It's brutal on seniors. In fact, it's like a 20% cut in Social Security benefits.

The Kaiser Foundation says that "Among the estimated 5 million affected 65- and 66-year-olds, about two in three would pay an average of $2,200 more for their health care in 2014 than they would have paid if covered under Medicare."

The average Social Security retireee receives about $11,000 per year in benefits. Making this change is like reducing Social Security benefits 20% for 3.3 million people.

The Kaiser study adds: "Nearly one in three, however, are expected to have lower out-of-pocket spending, mainly due to the health reform law’s coverage expansions through Medicaid and the premium tax credits available to low- and moderate-income Americans."

Unfortunately, that assumes that Medicaid will survive the deep cuts being planned for that program, and that devastated state budgets will be able to assume the extra costs. It also assumes that last year's health bill will survive the attempts to gut it - attempts which now unfortunately include this proposal.

3. It would lead to benefit cuts and create more job discrimination against older workers.

The Kaiser study cites the problems that employee retirement health benefits are having with costs. As a result, these programs are being slashed already and this change would make the situation much worse. It would also increase costs on health plans for active workers, which would lead to even more benefit cuts for working Americans.

And it makes it almost inevitable that job discrimination against older workers will get worse. Employers try to weed them out of the workforce just to keep their health care costs down.

4. Its impace is made even worse by the President's demand that a "health excise tax" on higher-cost plans be included in last year's health bill.

The President reneged on a campaign pledge to oppose taxes on higher-cost health plans, a McCain idea he mocked at the time. He had it right back then. "Luxury health benefits" (which are very rare for non-executives in real life) have very little effect on health plan costs. The age, sex, and location of employees are the real cost drivers. Then, in one of his few direct interventions in the legislative process for the health bill, he demanded that this tax be included in the final product.

Raising the retirement age would make this tax even costlier, multiplying the unfairness of the original health excise tax.

5. The number of uninsured Americans will go up.

This change undercuts one of the stated goals of last year's health bill: reducing the number of uninsured Americans. Private health insurers are allowed to charge much higher premiums to older Americans, but the tax penalty for going without insurance is the same.

That means many older Americans are likely to pay the penalty, since they won't be able to afford the massive premiums they'll face - even after they receive any government subsidies.

6. Health system costs will increase, too.

We already pay far more than any other industrialized nation for health care. Why? Because too much of our health system is run by private insurers who take a profit for themselves and have no real incentive to control costs or improve quality.

Most of our best cost and quality initiatives come from Medicare and Medicaid. The less medical care they manage, the more overall costs are likely to rise.

7. It doesn't address the real cost problem - chronic health conditions.

Data analysis shows that our real cost problem comes from people with intensive and frequently chronic health conditions. Five percent of the population accounts for nearly half of all health care costs, while the lowest-cost 50% only make up 3% of the cost. As you'd expect, older people are much more likely to be in the high-cost group.

Five health conditions account for a great deal of this cost: heart problems, diabetes, cancer, mental disorders, and pulmonary conditions. The best way for Medicare to reduce these costs is by identifying these conditions as quickly as possible and managing them aggressively.

Raising the retirement age will make it more difficult to do that, not less. Even worse, it's another example of our leaders shifting cost onto financially-strapped private citizens rather than addressing the real problem.

8. It's a step in the wrong direction.

We should be expanding Medicare, not downsizing it. Last year the Senate gave some consideration to making Medicare available to anyone over the age of 55, which is an excellent idea. This bill moves us in the other direction, placing the higher-cost needs of 66 and 67-year-old Americans in the hands of underskilled and overly profit-driven private insurers.

Disaster Scenario

Some of us warned that it would be politically disastrous if the government required people to purchase health insurance without offering a low-cost public option. The wise political heads inside and close to the Administration told us that, on the contrary, this bill would be a political winner in 2010. No doubt Sen. Scott Brown chuckles over that from time to time.

This bill doubles down on the political madness that began when the widely-embraced public option was dropped, despite the fact that 70% of all Americans (and 51% of all Republicans) wanted it. It puts the President on record as gutting the most popular program in the country. And it's likely to dramatically harden public sentiment against last year's health bill, as this "reform" gets lumped together with that legislation in the public mind.

Politics aside, this idea is a recipe for economic disaster. And if it's coupled with reductions to Social Security it will become an economic tsunami - that is, if it isn't one already. Even FEMA won't be able to rescue the Administration from an idea like this. The White House must be discouraged from making this recommendation -- now, or anytime.

Health Insurance Coverage Keeps Shrinking as Premiums, Family Costs Climb Ever Higher

Alex Lawson — Sun, 21 Jun 2009 00:21:03 -0400

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Extended Discussion Of Lewin Group

Alex Lawson — Sat, 11 Apr 2009 13:19:15 -0400

Here’s a more technical discussion of the Lewin Group’s new report on public plan choice for those who can’t bear to miss the trees amid the forest.

First the briefest possible background: Public plan choice means that people who don’t get coverage from their employer get the choice of enrolling in a public plan (in my vision, modeled roughly after Medicare) through some kind of new national insurance exchange (or at least I think it should be national). There would also be private plans in the exchange that people could choose. That’s why I call the idea “public plan choice.”

My proposal for public plan choice, “Health Care for America,” is pretty much the farthest you can go with the idea. I have no special treatment of small businesses. They have the same deal as other employers: cover your workers or pay a payroll-based contribution (6% of payroll, to be exact) to cover them through the exchange—aka “play or pay.” I would fold Medicaid and CHIP into the new play-or-pay system, so people who receive benefits from these programs would either get signed up for employment-based insurance or go into the exchange like other folks without workplace coverage. Obama’s campaign proposal didn’t fold in Medicaid and CHIP, and it exempted small employers from the contribution requirement (without, smartly, saying what counted as a “small employer”). Finally, my proposal has an individual requirement that people obtain coverage (which, because of the play-or-pay requirement, would only have really mattered for those without direct or family ties to the workforce), while Obama during the campaign said he would only require coverage for kids, though he indicated he’d be open to a broader mandate down the road.

Put simply, Health Care for America is a pure, undiluted proposal for public plan choice. So it’s notable that under my proposal, according to the Lewin Group’s analysis of a couple years ago, the public plan ends up with much lower enrollment in the public plan than projected in the Lewin Group’s new analysis (90 million versus over 131 million). (For aficionados, the national insurance exchange in my proposal would have larger enrollment, but around 38 million people in the exchange would choose private plans instead of the public plan.)

Even more important, if I had kept Medicaid and CHIP separate from the exchange, as Obama indicated he wanted to do during the campaign, then enrollment in the public plan (again, according to the Lewin Group’s analysis of a couple years ago) would have been well less than half the 131 million number that the Lewin Group is talking about now: just over 56 million. Since my proposal even without including Medicaid and CHIP is still more far-reaching than the Obama or Baucus proposals, 56 million should serve as the very upper-end estimate of how large the public plan would be under the proposals embraced by leading Democrats. Quite obviously, it is much, much smaller than 131 million.

So what’s going on?

The first clue as to what is going on is that the Lewin Group provides wildly different projections for enrollment in the public plan based on how generously the public plan is paying providers. If the public plan pays Medicare rates, which are significantly lower than private rates, then enrollment in the public plan is huge. If it pays private rates, then enrollment is tiny.

This might seem obvious. If rates are lower, the premium for the public plan will be lower and more employers will enroll workers in the public plan. But that’s not how play-or pay works. Yes, the price of the public plan affects whether folks in the exchange choose it. But the really crucial question for knowing how big the public plan will be is how many people are in the exchange in the first place. And in a play-or-pay proposal, that’s determined not by what coverage in the exchange costs, but by what employers have to “pay” if they don’t “play”—that is, what payroll-contribution rate they have pay to enroll their workers in the exchange if they decide not to offer coverage.

Assuming employers are indifferent between offering coverage on their own or paying the payroll-based contribution (which is what most analyses of play-or-pay proposals, including the Lewin Group’s previous analysis of mine, assume), then employers will put their workers in the exchange when the payroll-based contribution is less than it would have cost them to provide coverage on their own. The premium for the public plan matters not at all here, and neither, therefore, does the level of the public plan’s payments for medical services.

(Yes, yes, in a larger sense, the payroll-based contribution rate could be affected indirectly by what the public plan’s premium turned out to be, because if insurance through the public plan was cheaper, you could finance expanded coverage with a lower tax rate—or lower payments from other sources, since nobody thinks the payroll-based contribution will or should cover a huge amount of the total cost of coverage. Or you could offer better benefits than you originally envisioned. Whatever. But when you are designing legislation, or modeling a proposal, you have to say what the rate is. And it’s the rate, not the premium of the public plan, that will affect the decision of employers subject to the play-or-pay requirement.)

Well, you might say, perhaps the Lewin Group just assumed that the play-or-pay requirement would apply only to larger firms, which is what Obama suggested should be done during the campaign (again, without saying what a “small firm” is). This in fact seems to be what the Lewin Group is assuming: On page 2, they say “we assume the following” and then “[l]arge employers are required to offer insurance or pay a payroll tax.” (By “large,” The Lewin Group means 10 or more workers.) In the Lewin Group’s analysis, then, smaller firms, rather than have to choose between paying or playing, would be able to voluntarily enroll their workers directly into the exchange. They don’t have to play but they can pay to cover their workers.

Now I had always though that if this were the policy (“no need to play but yes, you can pay”), then small firms would buy into the exchange on the same terms that large firms did—that is, by paying the payroll-based contribution. But the new Lewin Group analysis assumes instead that small firms would just have to pay the premium for the public plan to enroll their workers in it. Allowing small firms to buy into the public plan by paying the premium might be a more generous policy than requiring that they pay a payroll-based contribution, depending on what the contribution rate and wages of the firms were, and so perhaps this could increase the number of small firms going into the exchange, especially if you gave them a lot of subsidies for covering their workers (The Lewin Group assumes that tax credits would be provided to small employers with low-wage workers.)

But if we’re focusing just on small firms and individuals without ties to the workforce, we’re still talking about a pretty small part of that big 131 million number. According to the Lewin Group “if eligibility is limited to only small employers, individuals, and the self-employed, public plan enrollment would reach 42.9 million.” Put another way, roughly 90 million of the folks that the Lewin Group thinks are going into the public plan are working for large (in their definition of “large” as 10 or more workers) employers.

And that’s when I found the feature of the Lewin Group report that is really baffling. The payment levels paid by the public plan matter for large firms too. Check out Figure 4 in the report (reproduced below). If you look at the row that says “enrollment in national public plan” you will see that the public plan enrollment rises across the first three columns as the payment rates of the public plan go down to Medicare payment levels. These first three columns are for a proposal that only includes small firms, the self-employed, and individuals—the proposal that the Lewin Group says would result in 42.9 million in the public plan. As I’ve said, if the convoluted scenario I have described above for the treatment of small firms were really what was put in place (hey, small firm, you can buy bargain-basement coverage from us), then I could see something like this happening. Lower payments mean lower public plan premium, which means more small employers enrolling their workers in the public plan (and more individuals and the self-employed coming in); ergo, bigger public plan.

But now move to the right along the row and look at the next three columns. They show the change in public plan enrollment as rates come down to Medicare levels (lowering the cost of the public plan) under a proposal that applies to all firms. In this proposal, the large firms that are subject to the play-or-pay requirement are brought in. So we should definitely see more people go into the public plan under this scenario. What we should not see is what the columns show, that the number of people in the public plan rises as the payment levels of the public plan (and hence its premiums) fall. This is exactly what I just said cannot and does not happen under a play-or-pay proposal. The cost of the public plan has no direct bearing on the decision of employers who are subject to the play-or-pay requirement. They only care what the “pay” option entails, which is determined by the payroll contribution rate—not, I repeat not, by the public plan’s premium.

Puzzled, I wrote the Lewin Group. I received a quick and gracious reply that cleared up what was going on, but left me equally puzzled about why the Group came up with the very odd hypothetical proposal that they did.

Here are the key details of the proposal that the Lewin Group analyzed:

1. There is no exchange with private plans alongside a public plan. Employers and individuals simply buy into the public plan.

2. To buy into the public plan, all employers and individuals just pay the premium for the public plan (with subsidies for small low-wage firms and low-income individuals).

3. Employment-based health insurance would be community rated, meaning all firms would pay the same rate for the same benefit, regardless of the health status of their workers.

4. If a large firm (10 or more workers) didn’t provide coverage, it would pay a fine of 6% of payroll. However, this fine would not be applied to the cost of coverage.

So the Lewin Group’s hypothetical proposal assumes that all employers can buy into the public plan by paying its premium. There is no exchange—a key feature of Obama’s campaign proposal, my plan, Senator Baucus’s plan, and just about every other leading reform proposal. Odder still, the Lewin Group proposal says that larger employers that don’t provide coverage have to pay a 6% tax but that the tax is simply a fine, not a payment for coverage.

In other words, Lewin Group completely ignored the play-or-pay requirement. They assumed not just that small employers could buy into the public plan directly at the public plan’s premium, which is a strange assumption since it ignores the exchange and private plans within the exchange altogether. When they turned to the hypothetical proposal that gave them the headline-popping 131-million figure, they assumed that all firms—even large firms—could buy into the public plan directly simply by paying the public plan’s premium. Meanwhile, they treated the play-or-pay requirement not, in the proper way, as a central financing mechanism of reform that involves employers that don’t provide coverage paying a payroll-based contribution to cover their workers. Instead, they treated it, in essence, as a fancy penalty system for large employers.

Finally, and equally strange, the Lewin Group assumed that employment-based insurance would be subject to a rule known as “community rating”—that is, all employment-based plans would have to charge the same rate for the same benefits, without variation based on the health status of enrollees. A firm with healthy workers would pay the same amount for private coverage as a firm with less healthy workers. This, of course, raises the cost of private coverage for large firms that have healthy workforces, and thus (once again) increases enrollment in the public plan.

But that’s not an idea that Obama or any other reformer that supports the broad play-or-pay reform framework has embraced. Premiums would be community-rated in the exchange and in the individual market, but not in the employment-based insurance market.

In short, the Lewin Group’s hypothetical proposal has three features that guarantee the public plan will be big. Whatever “131 million enrollees in the public plan” represents, it does not represent an accurate picture of Obama’s campaign pronouncements, or Max Baucus’s “White Paper,” or my plan, or any other proposal under serious consideration today.

To get an estimate of how many people will end up in the public plan, therefore, we need to go back to the Lewin Group’s analyses of proposals more or less like what Obama proposed during the campaign—namely, play-or-pay plans with an exchange that features a competing public plan, and without extensive new rules on employment-based insurance. Those analyses (of my proposal or the Commonwealth Fund proposal) show that enrollment in the public plan is likely to be much, much smaller than the Lewin Group’s analysis estimates. Indeed, if you look at the Lewin Group’s analysis of my proposal (again, the maximalist public plan choice approach), more Americans have private insurance after reform than do before—either through their employer or through the new national insurance exchange.

What’s more, these are probably upper-bound estimates of the size of the public plan, since the Lewin Group assumes that employers are indifferent between providing coverage directly and paying into a public program. If, as I suspect, employers prefer to provide benefits directly and gaining the goodwill of their workers by doing so, rather than paying a tax to let government sponsor those benefits, then enrollment in the public plan is going to be even lower. (How much credit do employers get for their contribution to Social Security, after all?)

In sum, the Lewin Group’s report confirms what we knew already: public plan choice will save big money. Unfortunately, however, the Lewin Group’s report doesn’t cast any new light on the issue that has gotten the report the most attention: how many people will be in the public plan. Public plan choice will help make coverage more affordable and slow the increase of health costs. But it’s not going to massively displace employment-based health insurance—at least if we adopt the real policies advocated by leading reformers, rather than strange hypothetical policy outlined by the Lewin Group.

There’s just one final puzzle: Why did the Lewin Group analyze a proposal that’s not on the political agenda? (The proposal closest to the one the Lewin Group tried to analyze is Pete Stark’s modified “Medicare-for-All” proposal, which would allow employers to buy into Medicare.) I don’t know, but I find the obvious conspiratorial responses unlikely. No, I think the reason is probably more conventional than conspiratorial and therefore worrisome in its own way. I think the Lewin Group wanted a big media hit, and they certainly got one. But what their success shows is that on health care, the media just doesn’t have the intellectual wherewithal to dig deep into statistical models of health policy. Instead, journalists are likely to report the “top lines” without more than a passing interest in where they come from. We’re going to be seeing a lot more of this in the coming weeks. Let’s hope that our political leaders won’t lose sight of the necessity of health care reform in the fog of biased and badly done analyses.

NEW REPORT: PUBLIC INSURANCE OPTION NEEDED TO PROVIDE AFFORDABLE, QUALITY HEALTH COVERAGE

Toby Chaudhuri — Wed, 17 Dec 2008 16:11:13 -0500

A new public health insurance plan that competes directly with private insurers is essential to controlling health care costs and improving the quality of care, according to a new report released today by the Institute for America’s Future and the UC Berkeley School of Law’s Center on Health, Economic & Family Security. The report, by health care expert and UC Berkeley professor Jacob Hacker, says a public health insurance plan like Medicare offered together with private health plans could result in $1 trillion in national savings over ten years by driving down costs, improving efficiencies and fostering innovation.

President-elect Obama, his health care point person Tom Daschle, Senate Finance Committee chairman Sen. Max Baucus and House Ways and Means Health Subcommittee chairman Rep. Pete Stark, D-Calif., have all embraced the idea of adding a public plan to help fix the ailing health care system, but the insurance industry opposes a public option. New data in today’s report provides fresh ammunition to this debate by showing how a public plan can maintain lower costs over time while providing broad, guaranteed and quality coverage.

Dr. Hacker released the report on a conference call with reporters today noting that the clearest evidence of the savings produced by a public plan is its premiums.

“Premiums with a public plan cost about three-quarters the amount private insurers charge for the same set of benefits,” said Hacker. “It’s an essential element to any national health care reform proposal.”

Hacker said that private plans operating without public insurance competition have been unable to contain spiraling health care costs and unwilling to cover at-risk patients. However, a public-private hybrid can provide an important check on both public and private sectors, ensuring flexibility, accountability and inclusiveness.

Rep. Stark agreed with Hacker on today’s call, declaring that it’s time we had an alternative plan that’s driven by cost-controls and quality care, not private profit.

“A public plan is an important component of any health care reform,” said Rep. Stark. “A public plan like Medicare would be more efficient and would provide greater choice. Without a public plan, insurance companies will have little incentive to control costs, reaping profits at the expense of beneficiaries.”

Institute for America’s Future co-director Roger Hickey joined Rep. Stark and Hacker on the call, noting that the national health care debate will center on the public insurance option.

“Public insurance as part of a comprehensive solution was fully debated in the 2008 elections,” said Hickey. “People across the country believe public insurance is a common-sense choice that will help control health inflation and assure quality.”

Hacker’s report, “The Case for Public Plan Choice,” clearly shows that public insurance has a better track record than private insurance at reining in costs while preserving access to quality services. A public plan is essential to set a standard against which private plans must compete. The report outlines how public insurance has pioneered new payment and quality-improvement methods that have often set the standard for private plans and how it has the potential to carry out these vital tasks even more effectively in the future, using information technology, large databases of practices and outcomes, and new payment approaches and care-coordination strategies.

# # #

**A summary and copy of the full report, “The Case for Public Plan Choice,” is available at http://institute.ourfuture.org/hacker, or http://www.law.berkeley.edu/chefs.htm. A recording of the call is available at http://assets.ourfuture.org/audio/20081217-Hacker-Plan-Press-Conf.mp3.**

The Case for Public Plan Choice in National Health Reform

Alex Lawson — Tue, 16 Dec 2008 17:23:40 -0500

Read the Key Findings »
Read Full Report »

A health care system that contains costs and drives value must include a good public plan if the broad goals of reform—universal insurance and improved value—are to be achieved. Private insurance and public insurance have distinct strengths and weaknesses, and thus should be encouraged to compete side by side to attract enrollees on a level playing field that rewards plans that deliver better value and health to their enrollees. Public insurance has a better track record at reining in costs, while preserving access; it has pioneered key quality and payment innovations that have often set the standard for private plans; it is essential to set a standard against which private plans must compete to drive value and can be a source of stability for people. Private plans are a source of new benefit options, and continuing pressure for innovation in benefit design and care management strategies.

According to opinion polling, most Americans want public and private insurance competing side by side so that they can choose the best option for themselves and their families. Both should have a chance to prove their strengths and improve their weaknesses in a competitive partnership.

Go to the dedicated web page for the report here»
Listen to an MP3 of the Press Conference releasing the report here»

Health Care For America Now!

Roger Hickey — Mon, 07 Jul 2008 11:38:45 -0400

On Tuesday, July 8, a new campaign will be launched – for Health Care for America Now! – at press conferences in Washington and 55 other cities and towns. We at the Campaign for America’s Future are proud to play a leadership role in launching this much-needed campaign, led by 100 national and local organizations.

The steering committee includes ACORN, AFSCME, Americans United for Change, Campaign for America’s Future, Center for American Progress Action Fund, Center for Community Change, MoveOn, NEA, National Women’s Law Center, Planned Parenthood, SEIU, UFCW, and USAction – not a bad core group to make history with. And now is the time!

Profound economic changes are convincing the public that we need to take action together to build a healthy, sustainable economy and ensure real security for all families. And that includes, first and foremost, making sure everyone has quality, affordable health care.

The mission of the Campaign for America's Future is to develop and promote bold policy ideas that can build a majority for change. We brought together environmentalists and union activists to promote an "Apollo project" investment agenda to make America energy independent – and to create the next generation of good American jobs. We sounded the alarm about conservative plans to privatize Social Security, and – working with a coalition similar to HCAN – we helped to defeat those dangerous plans to undermine retirement security.

So it was only natural that over the last two years, we have been encouraging health care experts to think big, to come forward with plans to cover everyone who doesn’t have good health care coverage, while reining in spiraling costs by reorganizing the most inefficient aspects of what is today a very fragmented, wasteful and unstable health care system.

For two years, we have worked to promote discussion of the Health Care for America plan, written by Yale University health expert Jacob Hacker and published in January 2007 by the Economic Policy Institute. Praised by activists, policy experts and labor leaders, the Hacker-EPI plan helped inform the policy work and public opinion testing of many progressive organizations. And partly as a result of our discussions with the presidential candidates and their policy teams, and our pointed health care questions to them all over the blogosphere during the primary election debate, it became the template for the health care plans of candidates John Edwards, Hillary Clinton and Barack Obama. National Public Radio reported in January 31:

All three plans (Obama’s, Clinton’s and Edwards’) came from the same source: a Yale University political science professor named Jacob Hacker. And all three were based on the concept of something called "shared responsibility," where government, individuals and employers all pay something. . . . So, Clinton and Obama would let people keep their existing coverage if they want to, or buy into a government-sponsored plan like Medicare, and the government would subsidize small businesses and the poor.

Most Americans know that we can’t depend on the health insurance industry – or the drug companies – to solve the big health care problems of spiraling costs and millions with inadequate insurance or no coverage at all. In fact, those companies and their lobbyists are a big part of the problem. Clearly, if insurance and drug companies want to be part of a national system to cover everyone, they cannot be allowed to exclude people from coverage, including people with pre-existing conditions. They will have to sell good, comprehensive insurance that we can afford, stop shifting costs to us through high deductibles and co-pays and stop employing devious tricks to deny people with coverage payment for their health care services. And, while we believe everyone should be free to keep or elect private health insurance, everyone should also have the choice to enroll in a public, Medicare-style insurance plan that guarantees affordable coverage, without a private insurer middleman.

So a big part of our contribution to HCAN will be to distribute research and analysis that makes the case not only for why we need change, but for the kind of change we need. Information is power, and we will distribute this information to the many parts of our grassroots coalition. And we will push forward health care policy experts and opinion leaders whose views on health care need to be heard, nationally and locally, in Congress, in the media, on the web and in the field.

Another project HCAN and CAF will engage the public in is a campaign that and demonstrates all the many ways that insurance and drug companies put their profits before our health care and use their political influence to undermine health care change.

Most politicians now say they favor some kind of health care “reform,” but HCAN is mobilizing a citizens’ force that can make sure we do it right, based on the principles of choice, affordability, shared responsibility, and fairness. Without the kind of public mobilization HCAN is bringing to this debate, we could end up, once again, with a system that leaves us at the mercy of predatory private insurance and drug companies.

We’re excited to continue our leadership on this critical kitchen-table issue, and confident that the new Health Care for America Now! coalition will empower the public to triumph over special interest influence and solve the growing health care crisis.

McCAIN WOULD DRIVE UP HEALTH CARE COSTS FOR FAMILIES, WHILE BENEFITING HEALTH INSURANCE COMPANIES

Toby Chaudhuri — Tue, 29 Apr 2008 13:00:00 -0400

WASHINGTON – Sen. John McCain’s health care plan would dismantle the employer-provided system that covers more than 60 percent of non-elderly Americans and drive up health care costs, according to experts responding to the announcement of his proposal today. An average family could see their health care costs as much as double under the McCain health care plan, according to an analysis by the Campaign for America’s Future.

Campaign for America’s Future co-director Roger Hickey, one of the leaders of a new coalition of groups working to fix the broken health care system, said that Sen. McCain’s plan would tax the health care premiums employers pay for their workers, encouraging most companies to stop providing any coverage. Hickey noted that instead of lowering costs, this would force millions of Americans to buy more expensive coverage with inadequate tax credits, greatly increasing the number of families who can’t afford quality care.

“John McCain’s plan must’ve been written by the insurance companies. It leaves them in more control of America’s health care system than ever before,” said Hickey. “John McCain wants us all to buy insurance not as part of a group – like an employee group or a co-op – that can negotiate for better coverage at lower premiums, but as individuals, at the mercy of the private insurance companies. It would leave millions of people with worse coverage, more chronic health problems and higher levels of health cost-driven bankruptcies.”

Most people, even those with good insurance, don’t get the health care they need, contributing to rising health costs. Sen. McCain, however, believes that the problem with health care is that Americans have too much insurance and that if consumers pay for it out of their own pockets, they will in turn force hospitals and insurance companies to become more efficient.

Dr. Jacob Hacker, a professor at Yale University and the author of the “Health Care for America” plan, which Sens. Barack Obama, Hillary Clinton and John Edwards used as the basis for their health care proposals, disagrees with McCain’s fundamental premise. Hacker said the real problem is rising health care costs and declining coverage.

“McCain’s proposal doesn’t address either of these problems in a serious way,” said Hacker. “The real problem for most Americans isn’t just less coverage. It’s that they risk losing coverage or they can’t get coverage when they’re unhealthy, particularly in the individual market. McCain’s proposal does nothing to provide that kind of broader health security.”

AFL-CIO political director Karen Ackerman joined Hickey and Hacker on a conference call with reporters today and announced details of a new campaign to explain the devastating effects of Sen. McCain’s health care plan to millions of voters nationwide. The AFL-CIO campaign will include a massive national canvass to 200,000 union households on Saturday, May 17.

“While those with pre-existing conditions simply will have an even harder time finding health care than they do now, insurance companies -- and John McCain’s friends who lobby for them -- stand to make a killing,” said Ackerman. “Working families need a fresh vision and new direction to turn around our country. So far, Sen. McCain has provided neither. We’re working hard to make sure Sen. McCain hears the voices of working families.”

In early March, the AFL-CIO launched a major effort to educate voters about Sen. McCain’s economic record and plans, pressuring him at every campaign event he holds, including this week’s health care events in Florida, Pennsylvania, Iowa, Ohio and Colorado. In the coming weeks, the AFL-CIO will focus on 13 million union voters in 23 battleground states, educating them on exactly who stands to benefit from Sen. McCain’s health care proposals, communicating with voters at the worksite, the doorstep, on the phone, through the mail and online.

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HEALTH CARE COSTS BACKGROUND

$11,765	Average premium cost of the most popular employer-based plan last year [Kaiser Family Foundation]
$5,000	Tax credit for a family under the McCain plan [johnmccain.com]
$6,765	Average additional yearly cost per family under the McCain plan [Campaign for America’s Future]
$3,226	Average amount per worker employers paid for premiums last year [Kaiser Family Foundation]

Lewin Findings on Hacker-EPI Health Plan: Good News for Obama and Clinton

Roger Hickey — Sun, 17 Feb 2008 14:33:01 -0500

Last week, the Economic Policy Institute released an important analysis of Jacob Hacker’s Health Care for America (HCFA) plan by the respected health economics team at the Lewin Group. As you can read in the EPI press release, Lewin found that HCFA would cover everyone in America, while saving the U.S. economy over a trillion dollars over the next decade. And the efficiencies achievable primarily through Hacker's public health insurance plan would save enough money that, after modest premiums from employers and individuals, the new system would cost the US government only $50 billion more than what we are paying now for a system that leaves millions uninsured or badly insured.

A year ago, just as EPI was publishing Hacker’s HCFA plan, CAF had already gone to work, engaging everyone who would listen in public and private educational discussions about the Hacker-EPI approach -- including Presidential candidates from both parties. After a year-long dialogue, we can see how Hacker’s work has become the template for both Barack Obama’s and Hillary Clinton’s health care plans. And just as importantly, our allies in the labor movement, public interest and community action networks are coming together around basic health care principles that are based on Hacker’s model for health care for all. More on this soon – here at this website and at the Take Back America conference.
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